FINRA Slaps Rep for Texts, LinkedIn Messages
The rep exchanged more than 1,000 business communication outside allowed channels, FINRA says.
The Financial Industry Regulatory Authority has fined a registered rep $5,000 and suspended him for a month for using text messages and unapproved electronic messaging services like LinkedIn to communicate with clients and prospects.
Between September 2020 and September 2022, Marvin Somlo used electionic messaging services that were not permitted under the telecommunication policy at his firm, Network 1, according to FINRA’s order.
“These electronic communications included discussions of specific investments and their terms, market updates, and offers to make investor introductions,” the order said. “Certain of Somlo’s messages concerned IPOs for small cap issuers and other potentially high-risk investments.”
Somlo first registered with FINRA in 2016. He was registered as a general securities representative and an investment company and variable contracts products representative through an association with Network 1 Financial Securities Inc. from September 2020 through September 2022, the order states.
In that time period, Somlo exchanged “more than 1,000 communications with 25 customers and prospective customers regarding securities related business via text message and other electronic messaging platforms (i.e., WhatsApp Messenger and Linkedln) that were not permitted under Network 1′s Electronic Systems Telecommunication Policy,” FINRA’s order states.
As a result, the firm did not preserve Somlo’s messages as required by Section 17(a) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a-4(b)(4).
By causing Network 1 to maintain incomplete books and records, Somlo violated FINRA Rules 4511 and 2010.
While associated with Network 1, “Somlo completed two Electronic Systems Telecommunication Policy Affirmations in which he affirmed his understanding of the firm’s prohibition on the use of non-firm electronic communication systems and agreed that he would not contact a customer using such systems,” the order states.
Somlo has been registered at Merrill Lynch since January 2023, according to FINRA’s BrokerCheck.